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The Nation: Turning the European Debt Myth Upside Down

“Industrious” Germany and “lazy” Greece: when ants gamble, grasshoppers pay

While lots of empathy has been expended on the plight of people in Greece and Spain, most of us did not fully dismiss the narrative of PIGS’ profligacy and laziness versus the industrious and disciplined core EU.

Foreign Policy in Focus and The Nation jointly published Conn Hallinan’s revealing analysis on what exactly was hidden behind this ultimately racist blame game. Here is a glimpse of their strong case against corporate bankster colonialism:

“The European debt crisis has little to do with poor budgeting and everything to do with crony capitalism.”

“…Europe (like the United States) moved its gambling debts “from the private sector to the public sector — a well-established pattern over the past half-century.”

“..to save the Anglo Irish Bank, Irish taxpayers shelled out $30 billion euros, a sum that was the equivalent of the island’s entire tax revenues for 2009. To raise the money, the European Central Bank — which, along with the International Monetary Fund and the European Commission, makes up the “Troika” — strong-armed Ireland into adopting austerity measures that tanked the country’s economy, doubled the unemployment rate, increased consumer taxes, and forced many of the country’s young people to emigrate. Almost half of Ireland’s income tax now goes just to service the interest on its debts.

“And poor Portugal. It had a solid economy and a low debt ratio, but currency speculators drove up interest rates on borrowing beyond what the government could afford, and the European Central Bank refused to intervene. The result was that Lisbon was forced to swallow a “bailout” laden with austerity measures that in turn torpedoed its economy.

“In Greece’s case, too, while the country has no shortage of wealthy tax evaders, the myth of profligacy falls flat. Germany, Sweden, and many other European countries spend more of their GDP on services than does Athens. Greece spends 44.6 percent of its GDP on its citizens, which comes in just below Germany’s 46 percent and well beneath Sweden’s 55 percent.

“And as for lazy: Greeks work 600 hours more a year than Germans.

“According to economist Mark Blyth, author of Austerity: The History of a Dangerous Idea, Greek public spending throughout the 2000s was “really on track and quite average in comparison to everyone else’s.” Its so-called flood of “public sector jobs” consisted of “14,000 over two years.” All the talk of the profligate Greek government is “a lot of nonsense” and just “political cover for the fact that what we’ve done is bail out some of the richest people in European society and put the cost on some of the poorest.

Read the full article here

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